Thursday 21 May 2009 19.15 EDT
First published on Thursday 21 May 2009 19.15 EDT

Gordon Brown yesterday went to the defence of cabinet ministers Geoff Hoon and James Purnell, who stand accused of not paying capital gains tax on their ­second homes, saying there was "no problem" with their financial arrangements.

The prime minister's spokesman said Hoon, the transport secretary, and Purnell, the work and pensions secretary, had acted "within the letter of the law and the spirit of the parliamentary rules" but by contrast continued to say that the failure of the communities secretary, Hazel Blears, to pay tax on her second home sale was "totally unacceptable".

Blears is becoming increasingly angry at the way in which she believes she has been singled out. In her Salford constituency yesterday, she admitted people were angry, but said: "I am not going to get into a debate with you in the media about any colleague of mine or about the prime ­minister and what he said. I know exactly what I think. I am within the rules. The prime minister said he has got full support in me. He said I am doing a great job."

Brown's defence of Hoon and Purnell came on the day that:

• Dr Ian Gibson, the leftwing Labour MP for Norwich North, offered to resign over a decision to sell his second home in London at below the market rate to his daughter. She had lived in his flat, full-time and rent free, when he was there three days a week claiming expenses from the taxpayer for the cost of the mortgage, as he was entitled to. Last April he said he sold the flat to his daughter and partner for £162,000 after buying it for £195,000 and even though it was valued at up to £300,000. Gibson said he had always planned to pay any capital gains tax, and he had sold the flat to his daughter so he could rent a smaller property close to the Commons.

He said he will stand down if he feels his constituents believe he took a step too far in helping his family. Initial indications suggested his local Labour party planned to rally in his support today, and will not press for him to be deselected.

• Ben Chapman, Labour MP for Wirral South, announced he will stand down at the next election, after he was accused of claiming £15,000 mortgage tax relief on a property with no outstanding mortgage. Chapman, 68, published a letter from the fees office director of operations, Terry Bird, who said the advice he was given on his claim was "incorrect at the time it was given" and expressed regret.

• Lord Rennard, the Liberal ­Democrat chief executive and mastermind behind decades of byelection victories, announced he was leaving his post, citing health reasons. He has been under pressure over his expenses, but he said in his resignation letter that he had been planning to stand down for many months.

It also emerged yesterday that the independent audit of all MPs expenses for the past four years would take three months. The all-party members estimates committee is expected to ask PricewaterhouseCoopers to undertake the audit.

A committee source said PWC may be able to comment on the laxity with which the nominally strict rules were enforced, but details of the contract have still to be agreed. The committee will also be empowered to order MPs to pay back any claims that breached the rules.

The findings of the independent audit are to be passed to a Labour party ­disciplinary panel, as soon as the audit is completed.

The Labour NEC panel is due to ­interview three MPs, David Chaytor, Elliot Morley and Margaret Moran, about their expenses. A Labour source said they expected the panel to be meeting weekly, and thought the members' estimates committee's timescale for handing over its audit findings meant Labour will not need to set up its own audit of claims.

In a video interview with the Guardian the Labour deputy leader, Harriet Harman, said: "I think there will undoubtedly be people not standing at the next election who might otherwise have decided to do so. I can't give you any sense of numbers, but … the public expect high standards."

She contrasted Labour's process of slower justice with the summary justice being meted out by the Tories. She said: "It is important that when allegations are made, action is taken, but that there is an orderly and fair process. It's not for the leader of our party to be able to just say: 'I am personally going to decide who is going to stand at the next election.' That is rightly the responsibility of the party. But I don't think this is a question of competition between the parties as to which party leader can chop more heads off."

Capital gains

All three may have been liable for capital gains tax. Under HM Revenue rules, sellers can claim a property is a main residence and not pay the 40% levy as long as they lived there less than three years before the sale.

What did Geoff Hoon do?

He purchased a property with his wife in Courtney Street, south London, before he became an MP. In 1997, on becoming a minister, he was required under the ministerial code at that time to live in London. He nominated Courtney Street as his London home. He moved into Admiralty House in 2002 on security advice. He did not personally profit from living in Admiralty House and the rental of the Courtney Street property. When he sold the property in 2006 a full disclosure was made to the Revenue and all tax liabilities were paid, he insists.

What did James Purnell do?

Purnell bought a flat in London in 2000 and a house in his Manchester constituency in June 2002. In 2004 he sold the London flat, but this was within the three year CGT-free limit. Critics claim he said his main home was in Manchester so claiming the second home allowance in London.

What did Hazel Blears do?

Blears said the Commons authorities made her designate her London flat as her main home when she became a minister in 2001. That rule was lifted in March 2004, and shortly after that she switched the designation so her Salford home became her main home. In 2004 she sold the London property - by then her second home to the Commons authorities - but declared it to the Revenue as her main home.